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Posts by Arthur Stupay

How MiFID II challenges the sell-side status quo

There is a lot of discussion on Wall Street regarding the new European rules regarding payment to securities firms for stock research (sell-side research). The research, often industry specific, provides company reviews and earnings forecasts, usually with a buy/sell recommendation.

In the EU in early January 2018, payment for sell-side research was put under strict rules called MiFID II (Markets in Financial Instruments Directive II). The aim of the new rules was to curb supposed excesses because they were sometimes used to cover high trading costs, expensive subscriptions and non-research items.

In the past, trading was part of the money management business and the commissions were to be used at the discretion of the manager. The client had little or no…

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